Indian economy to grow 7.2%

The Indian Government has today announced that the economy is expected to expand 7.2% in the year to the end of March.

The economy is making a strong recovery and expanded at an annual pace of 7.9% in the three months to the end of September, after growing 6.7% in the year to the end of March 2009.

Meanwhile, today’s announcement has raised the possibility that the Government will start to withdraw its stimulus measures.

Many Governments throughout the world introduced stimulus packages to boost growth within their economies.

Meanwhile, the latest growth expectations has led analysts to believe that the India will see a rise in interest rates sooner rather than later, in order to dampen inflation.

According to Rajiv Kumar at Delhi-based think-tank ICRIER: “These numbers mean that the government will have to consider exiting from the fiscal stimulus in the budget.”

He added: “Even if they don’t do that fully, I expect them to at least announce a roadmap for exit.”

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